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Rounds Let Bollen Break Securities Law? Democrats Hammering, GOP Yammering

Mike Rounds and the South Dakota Republican Party are having an awful time coming up with answers to the substantive charges of corruption surrounding Mike Rounds's economic development policies. Consider the latest revelations about misconduct under the Governor's Office of Economic Development and the frightened, deceptive responses from the flagging Rounds campaign.

Democratic lawyer Patrick Duffy stepped forward yesterday with a new charge against Rounds's EB-5 investment director Joop Bollen—securities fraud:

“Where was the state securities commissioner in all these LLCs and LLPs that were generating securities (the Bollen set up through the EB-5 program)?” Duffy asked rhetorically. “Most of this falls in our wheel house. It should have been investigated a long time ago.”

Duffy said the limited liability companies and limited liability partnerships that Bollen set up for projects were funded by EB-5 funds and were soliciting for investors. He says they should have been registered with state or federal regulators and prospectuses issued to potential investors [Todd Epp, "With Absentee Voting Starting Friday, South Dakota Senate Race Heats Up," Northern Plains News, 2014.09.18].

You can read my analysis of possible securities violations by Rounds's people in this December 2013 article.

Duffy reiterated the question of accountability that has bubbled to the top of the Rounds-EB-5 scandal. With so many violations of law, policy, and South Dakota common sense, why didn't Mike Rounds fire Joop Bollen?

As usual, the Republicans offer no answer to that question. They do not refute any of the charges of wrongdoing against Bollen. They do not refute that the Rounds Administration knew about Bollen's infractions. They do not refute that they rewarded Bollen after his infractions with a no-bid contract.

Instead, the Republicans blow smoke. Presenting no documents or direct testimony, Dick Wadhams, the out-state spokesman Mike Rounds recruited, shouts "sleazy" and "slimy" (oh, the irony) about an out-state PAC ad summarizing the Rounds-EB-5 scandal. Wadhams accuses Democratic Senate candidate Rick Weiland of campaign collusion with that PAC but offers no hard evidence. And still wishing for the campaign that wasn't, Wadhams tries again to drag Brendan Johnson into the Senate campaign, contending, not just without evidence but contrary to evidence, that there is no federal investigation of South Dakota's EB-5 activities. Knowing full well that a U.S. Attorney would violate the integrity of the criminal justice process by commenting on an ongoing investigation, Wadhams shouts that U.S. Attorney Johnson should comment on an ongoing investigation.

Noodling just a little closer to real issues at hand, SDGOP communications director Rob Burgess offers this helpless sputter:

Through it all Mike Rounds has been found innocent of any wrongdoing. Democrats are raising this issue because it’s quite simply the only thing that they have [Rob Burgess, quoted in Ben Dunsmoor, "SD Dems Want to Know Why Joop Bollen Wasn't Fired,", 2014.09.18].

Burgess's bleat is non-responsiveness par failure-ance. "Found innocent"? In what trial? In what investigation? Democrats have laid out pretty specific evidence that Joop Bollen broke rules in carrying out Rounds's economic development policies, that the Rounds Administration knew about that rule-breaking, and that the Rounds Administration then rewarded the rule-breaker. Burgess answers none of those charges.

Burgess resorts to the "Democrats are saying it, so it ain't so" fallacy. Suppose Mike Rounds's enabling of Joop Bollen's corruption was all that Demcorats talked about for the rest of the campaign. That fact alone does not make what they are saying about Rounds and Bollen false.

Republicans need voters to believe that Democrats are playing from a light bag of tricks. But Democrats are presenting document after document, policy after policy, law after law, showing that something went very wrong in Mike Rounds's administration of economic development policies. The diversionary responses from Wadhams, Burgess, et al. make it look like it's Republicans who have no good answers in their bag.


  1. 96Tears 2014.09.19

    Democrats playing politics? What other choice did Rounds, Daugaard, Tidemann, Jackley and the other thugs leave the people of South Dakota?

    Those bozos crapped in their own nest with felonious criminal activities, filling the pockets of their cronies with millions of public investment money, and when they got caught, they've shut down any hope of getting at the truth -- until after the election.

    Crybabies like Dickwad Hams have only themselves to blame for the loss of a sure bet to elect the incompetent boob Mike Rounds. Too bad Mike's criminal administration isn't sticking yet to his hand-picked successor Dennis Daugaard.

  2. 96Tears 2014.09.19

    And the Republican defense? The American News columnist Perk Washenberger gets the prize. He says he's a businessman who keeps good books, but he can't help it if an employee swipes some cash or merchandise.

    Yep. That explains the whole thing. Rounds and the entire Governor's cabinet and office staff can't be held responsible for one bad apple.

    The other Republican strategy is to keep believin' the average South Dakotan is too dumb to figure out embezzlement, racketeering and the EB-5 cash cow. We'll see how that works.

    Ooh! Politics is being played! Horrors!

    Of course, Larry Tidemann's actions to prevent putting Joop Bollen under oath before the Government Operations and Audit Committee, well, that's not politics. He's just being responsible.

  3. Don Frankenfeld 2014.09.19

    Your coverage of the EB-5 mess has been terrific; you and Mercer should share a Pulitzer or something. But there is so much stuff involved, plus lots of wildly differing interpretations concerning what the stuff means, that even a normally analytical and curious person can get confused. So can you point me again to the evidence that "...the Rounds administration knew about the rule breaking." I don't ask the question to be antagonistic, but because I am genuinely confused. I am fully persuaded that Mr. Rounds should have known, but I am vague about the assertion that he actually knew. To me, this distinction is critical; it probably means the difference between incompetence and corruption.

  4. jerry 2014.09.19

    96 tears, you are correct all the way around and I would add that this Rounds corruption has stuck to the anointed one, Dennis Daugaard. You see, under his administration, he and the rest of the gang have stonewalled the investigation into his crime bosses activities to protect his fanny. Daugaard could easily direct his attorney general into getting the facts. As the leader of the republican party in South Dakota, he could direct the stooge Tidemann into forcing Joop Bollen out into the open. Daugaard is not interested in that though, because he is in just as deep. Apparently, securities fraud is not as serious as it once was and is no longer a federal crime. Madoff should now be released from the jail as his ponzi scheme is no different than the state of South Dakota ran.

  5. Roger Cornelius 2014.09.19

    What am I to believe about Wadhams and SDGOP comments?
    First they say Rounds has been found innocent. End of investigation.
    Then they say there is no ongoing federal investigation, but demand that U.S. Attorney General reveal the results of his investigation.
    Is this just sputtering, or am I missing something?

  6. mike from iowa 2014.09.19

    In South Dakota,imagined collusion between a Dem and a Pac is a crime. In Wisconsin,collusion between wingnut guv Walker and Wisconsin Club for Growth is a 1st Amendment issue.

  7. Jenny 2014.09.20

    This EB5 mess just shows how much an open records law is badly needed in SD.

  8. 96Tears 2014.09.20

    According to Rounds' ad (and GOP thinking in Pierre), there was no problem with EB-5. None whatsoever. So, why would anyone want to change South Dakota's excellent open records laws? We already have all the information we should have.

    Stepfordize your brain. Get your mind right.

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